Wednesday, 14 January 2009

It's Hard Not To Laugh

It appears that Punch Taverns are having a bit of a 'mare.

Punch Taverns Plc, the U.K.’s largest pub owner, fell to a record low in London trading after reporting reduced sales and profitability, and saying it sees no improvement in business conditions as the economy weakens.

Punch dropped as much as 23 percent and traded down 11 pence to 46.75 pence at 12:16 p.m. local time, heading for the lowest close since a May 2002 initial public offering. Shares of rivals Enterprise Inns Plc and Greene King Plc also slid.

Profit at outlets leased to tenants and open at least a year fell 12 percent in the 20 weeks ended Jan. 10, Burton-Upon-Trent, England-based Punch said today. Sales at outlets managed by Punch dropped 2.5 percent on the same basis, while the operating margin, a gauge of profitability, narrowed by 5 percentage points because of rising food and energy costs, and price promotions.

Punch scrapped its second- half dividend in September and is repurchasing bonds to whittle away at debt that’s about 35 times more than its market value.

In fact, the pub chain's share price has fallen by 92% in the past year. So what is to blame?

Business conditions are likely to remain difficult “for the foreseeable future,” the pub owner said. The slowing economy, coupled with supermarket discounts on beer, are leading Britons to cut back on nights out.

Take your fingers out of your ears Punch, stop saying 'lalalalala', and think again. Below is how Punch shares have performed since 2003, they peaked at just over £13 per share in around about, ooh let's see, July 2007. It's been all downhill, quite literally, since then.

It's a startingly different outcome to the one they were naively expecting 18 months ago.

Francis Patton, customer services director said: “Too many people are looking at the smoking ban as a threat, but we know this is a huge opportunity. The smoking ban is a great opportunity to get new customers (who want to eat) into pubs and also keep people there who go regularly.”

Prior to the smoking ban experiment, Punch Taverns chose to spout execrable guff like that rather than speak up for their business and their industry, and fight the Government on behalf of their customers. Instead they just rolled over and let the righteous tickle their tum.

At time of writing, their share price has further collapsed to 43p per share.



vincent1 said...

I agree,it is hard not to laugh Dick. If it was not for the people being added to the dole queue, or losing their homes/livelihoods/investments and homes, I would feel a warm glow myself.
When my daughter got married we used our share and other money for her wedding. They were worth about £10.00 a share at the time, if not more.
If we had of kept them until we retired, they would not have paid for a decent bunch of flowers lol.
Thank you for your blog, I love reading it.
I remember when the ban was looming, the information packs, the petitions, the stamps the envelopes ect, hundreds of them. Many others in the campaign site did the same. They went out to Breweries, camra, pubs, bingo halls ect. Did they get off their backsides to fight for their smoking customers, and those who are NOT smoke-haters. Did they hell as like. So I do find it hard to feel sorry for them now. The small independant ones, I do feel sorry for, they never had a "level playing field".
mandyv for smokers and non-smokers alike, fighting for choice and TRUTH

banned said...

Happily I gave up drinking in pubs some years ago so the smoking ban has not affected me that way.
That the pub chains did not stand up for their customers ( led by Weatherspoons who wanted to ban smoking anyway ) was a disgrace and they are now reaping the reward. The four pubs in my small city that have recently closed had one thing in common, no outside area in which to smoke.

Sue said...

What I simply can't understand is why people continue to put up with this ridiculous ban. The imperial weight crusaders won out in the end by sticking to their guns, so should the people who are losing their locals!

The Spanish government was going to blanket ban and then realised that the Spanish people would ignore it completely or worse still, riot. So they had to comprise!

I honestly don't understand why the breweries aren't standing up and saying something. After all, it's putting them out of business.

The stuffing has been knocked out of the British people! As each day dawns another ridiculous law/rule/policy comes along.

IanPJ said...

It was always said that if there was such an overwhelming public outcry for a smoking ban in pubs, then the industry would have filled that need beforehand, with hundreds of no smoking pubs being available.

There wasn't, they didn't and the subsequent smoking ban has killed the industry.

vincent1 said...

Sue, that is spot on "The stuffing has been knocked out of the British people! As each day dawns another ridiculous law/rule/policy comes along".